Reblog: The Debate Over Position Sizing
“If you wake up thinking about a position, it’s too big” Steve Clarke
“Make your position size more a function of not how much you can make, but really how much you can lose. So manage your position based on your downward loss perspective not your upward potential.” James Dinan
“We will make something a large position if we think there is an extremely low chance of losing money on a permanent basis. Even if we think it might be a 4X return, if the idea could be a zero, it’ll be a small position” Ken Shubin Stein
“I’ll limit position sizes when potential outcomes are too binary” Chris Mittleman
“We do not bet the ranch on any single investment; few positions have exceeded 5% of assets in recent years” Seth Klarman
“We size things based on how much we think we can make versus how much we think we can lose. We’ll probably be willing to lose 5-6% of our capital in any one investment” Bill Ackman